In the simple Keynesian cross model with no government or foreign sectors, the value of the multiplier is defined as

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The value of the multiplier is 1/(1-MPC) in the simple Keynesian cross model with no government or foreign sectors. This means that any increase in autonomous expenditure (such as investment or consumption) will lead to a larger increase in equilibrium output. The MPC (marginal propensity to consume) is the fraction of additional income that is spent on consumption, so the multiplier is larger when the MPC is smaller (as in the case of a high marginal propensity to save).

In the Simple Keynesian Cross Model with No Government or Foreign